Idea: Hyperinflation will occur in Japan and Europe before it happens here, due to the poorer states of their economies. When that happens, international demand for the USD will rise dramatically, which will actually have a deflationary effect. But it will be very mild because the Fed will simply use the opportunity to increase printing, to control the deflation. Of course this will backfire (as they will always print too much and for too long, like they have been doing now) and of course printing doesn't actually work to stimulate the economy, as we've learned from every other country that's tried it, including the U.S.

So we will get deflation and then hyperinflation. Wild times, and those who can hold on and trust the principles that have guided them thus far will come out stronger in the end.

This opinion was laid out in a Goldmoney interview that was recently posted in the "Gold collapsing. Bitcoin UP" thread in Speculation.

I've seen that idea around and I find it persuasive, especially if the US$ remains the world's reserve currency. However, the new source that I've been scratching my head about claims in effect that it would have worked out like that in the past but that now with digital money rapidly replacing banknotes, the lags you cite will not happen. The claim is that the global system can now either all be propped up simultaneously (presumably by Team Bernanke using mechanisms like Fedwire) or it could all blow simultaneously (presumably by almost any "last straw" event, with "bond vigilantes" being one obvious possibility).

The notion is that the Fed now has its thumb on the whole global system and that national economies no longer matter (potentially, at least).

"This time it's different". Famous last words, but perhaps it's true. Good time to be in BTC (I hope). Dangerous time to be on the planet though. Meh - I sound like one of the "buy, buy buy" trolls. Disclaimer: this is not investment advice. I'm as puzzled as the next person.

1) Because he has the printing press. And the world still trades mostly on US Dollars. It gives Ben lots of political and economic power. The other central bankers will coordinate with him. To keep the game going.

2) He is not going to Jackson Hole speech this year. Everyone reads this as he's going to retire from the role of the central banker. So between now and August, he is going to be fine.

3) Can't raise the rates because as soon as he does, government fiscal problem will get ugly really fast. Can't have that political instability. So with the current $85B asset purchase going on regularly, and things seem to be fine, you'll be surprised this can go on for many more years than we can imaging.

The best course for Ben is keep doing what he's doing, and talk the inflation expectation down through speeches and Federal Reserve minute release.